Market research has shown that if you look at the occasion of female drinking the Friday and Saturday together score 70% of the total occasions. This means that our marketing or more specific advertising and promotional activities should be concentrating on the Friday and Saturday.
We can even be more specific and focus with the campaign on the late afternoon and the evening since 80% of the female will consume their drinks between late afternoon and late evening.
If we look at the occasion where female drinkers are consuming and drinking: 80% of the targetgroup is consuming while hanging out with friends and colleagues. Note that positioning the product “while listening to music” will be different from “just having a drink” positioning.
Further analysis also showed the type of place female drinkers are consuming RTD’s. In 75% of the cases consumption takes place in the traditional pubs followed by 20% consumption in night clubs. Advertising and promotion therefore will take this into account.
Consumer Analysis:
Our Bacardi Breezer consumer analysis is based on 4 consuming indicators: Upbeat versus Low key, and Ordinary versus Special. In our marketing strategy we will go into further detail how we are going to position our Bacardi Breezer Light and how we are going to communicate the message to our female drinking target group.
Some characteristics of our female target group: Independent, Party girl, Conscious about health, Urban, Scene catchers, Predominantly scene followers, Sex and the city like wannabees.
Demographics
The main market for Bacardi Breezer Light is the female target group. Young males are proven to be the heaviest drinkers but they are already targeted in our earlier advertising campaigns. Young British women consumed an average of 203 liters of alcoholic drinks in 2002. While young adults will always be an important target group, investment in, and attracting female and older consumers, will create new drinking occasions and new opportunities. Both old and young consumers are becoming more selective - novelty, sophistication and female-friendly settings are now highly in demand. One of the most significant changes in European drinking patterns in recent years has been the increase in women's drinking. Young British women, aged between 18 and 39, are by far the largest consumers of alcoholic drinks in Europe. Annual per capita consumption reached 203 litres in 2002 in the UK, compared to only 59 litres amongst young Italians. This is set to increase to 242 litres by 2007. Spain, however, shows the biggest increase with consumption of alcoholic drinks increasing by almost 60% between 2002 and 2007, to an annual 115 litres per young adult woman. This is partly because Spain is a less mature market and capable of rapid growth as young adult women become economically independent and societal attitudes to women drinking become less censorious. One of the clearest results of the in-creased female drinking has been the change in the on-trade environment.
Psychographics and Behaviours
Traditional beer-focused pubs in the UK and Germany have given way to bars such as All Bar One or Mediterranean style cafes which offer a more comfortable, open, well-lit, friendly environment. One of the key design features of the All Bar One chain is that the bar's frontage should be mainly glass, allowing prospective female customers to check the venue out before entering. This offers security and comfort, and also helps to develop trust (see also the model under 1.2.3. Consumer Analysis).
Women's demand for more access to the on-trade has also given rise to new drinks, and changed the shape of the market. The obvious example is the rise in FABs, which having initially been aimed at young consumers were quickly refined to appeal to women particularly. Wine, in particular, is popular with young women as it is perceived as being low in calories and sophisticated. Women's drinking habits have also led the rise of food occasions. Most noticeable is the growth of gastro pubs, cafes and other food venues in Germany, the UK and the Netherlands, which is partly due to the women's desire to avoid getting drunk too quickly.
One product that has been a huge success with young people is Bacardi Breezer, the bestselling brand in the youth-dominated and fast-growing premium packaged spirits (PPS) category. The secret of Bacardi Breezer's marketing success has been to connect with young people in a different way and keep in touch with their ever-changing interests. With the launch of Bacardi Breezer Light our focus is on the health sensitive individuals who want to cut down on sugar consumption. Since women are more “light” and diet focussed then men our focus will therefore primarily be on women in the age category 18-39.
Some other psychographics to keep in mind:
- People became media savvy and cynical - if they think they're being marketed at, they'll reject your product.
- They only accept the message if offered in their own language, and they're extremely brand conscious.
- People are watching less and less television.
- Drinks are no different from any other market: successive generations always want to discover their own brands, rather than simply consuming the same as their parents.
Geographical considerations
Sure applicable; coastal regions are an excellent spot to grow RTD’s for their tropical atmosphere, where central urban (cosmopolitan) areas are besides the spots to launch wine and classical spirit campaigns, they also have their own urban/underground scenes, which are very interesting from a marketing point of view.
Industry Analysis
In Europe Bacardi and Smirnoff represent the 1st and 2nd placed brands within the premium liquor market, which has been in a period of "flat to declining" sales for several years. The companies behind the brands, Bacardi-Martini for Bacardi, and Diageo for Smirnoff, have attempted to reposition their brands into a new market of RTD products. The traditional liquor markets targeted home users and sophisticated pub drinkers, while the new RTD market was aimed squarely at the emerging "Alco pops" market, established in the mid 1990s, targeting young pub/nightclub "party" drinkers.
The RTD market has been experiencing a period of rapid growth, increasing volumes by 35% in the past year in the Europe but that level of growth is not expected to be maintained this year. The market is fast eroding traditional "youth" market drinks, such as lager, bitter and cider, and currently accounts for 6% of the total UK beer market. Globally, RTD accounts for 1% of the beer market, shipping 153m nine-litre cases. (source: AcademicDB.com)
The competitive structure of the UK market is analysed and data is provided under the following market sectors:
1. Beer
2. Wine
3. Spirits, Liqours and Fortified Wines
4. FAB, Cider and Other Alcohol
5. Soft Drinks
6. Hot Drinks
We estimated the UK drinks market at £49.5bn in 2004, representing a 7% share of total consumer spending. We also expect the same figures for other Western European countries. In the 5 years leading up to 2004, spending on drinks is estimated to have risen by only 16%, or by 6% in real terms (at 1999 prices). The low annual average rate of growth stems from a combination of factors: the maturity of many drinks sectors, including beer, cider, cola, fruit juice and most spirits generally low inflation and severe price competition on drinks in the grocery sector and a lack of real innovation in the marketplace, with no major drinks categories breaking through.
It is wise to distinct product categories: ready-to-drink RTD’s (5,5% alc.), wines (10 – 14% alc), fortified wines (15 – 18% alc.) and spirits (above 17% alc.) generic and spirits by category: rum, whiskey, gin, etc. as this positions them in different markets. Further we need to distinct their distribution formats: bulk for distributors with own brands and facilities, specials for on-trade businesses (bottle and packaging sizes i.e. 187ml), regular packaging for BtC trade (75ml, 1,5ml), and so on.
Other names for the product are: FAB (Flavoured Alcoholic Beverages), white spirits, PPS = premium packed spirits, RTD= ready-to-drink. According to interview Breezers competitors are: RTD’s: Smirnoff, Passoa Diablo. Beers: longnecks in general (Heineken, Amstel bright, Desperado, Corona).
Competitive analysis
Identification of competitors including market share and product range
Diageo and Allied Domecq are Bacardi’s two major competitors. Half of the top ten liquor brands, see below, are now being held by the British-based Diageo.
Brand Category Retail sales($mil) Makete/Distr.
STOLICHNAYA vodka $1,960 Allied Domecq
BACARDI rum 1,820 Bacardi
SMIRNOFF vodka 1,815 Diageo
HENNESSY cognac 1,725 Diageo
ABSOLUT vodka 1,360 Future Brands
JOHNNIE WALKER RED whiskey 1,315 Diageo
JACK DANIEL'S bourbon 1,265 Brown-Forman
J&B whiskey 1,150 Diageo
BALLANTINE'S scotch whiskey 1,145 Allied Domecq
J. WALKER BLACK scotch whiskey 1,120 Diageo
Competitors’ strategies (positioning, target audience, 4 p’s strategy, etc.)
Diageo
Diageo has an outstanding collection of premium drinks brands. Championing nine of the top 20 premium distilled spirits brands (Impact databank), and operating in some 180 territories around the world, opportunities for growth abound. Their growth ambitions are focused behind their priority brands, in their most important markets.
Allied Domecq
Their strategy is delivering tangible results in the core spirits brands and robust performances from premium wine and Quick Service Restaurants. They are focused on three areas to drive competitive advantage and sustainable future growth:
- Portfolio: By building and innovating the brand portfolio through effective marketing, They will try to retain consumers who enjoy the brands and attract and excite new consumers to win greater market share.
- Presence: Through prioritising, developing and extending their geographic presence, they will try to establish strong positions in key markets across the world.
- People: By developing their people, harnessing their talents and being an employer of choice’, they will try to attract and retain the best people to deliver their business goals.
Their increased investment in these areas, particularly advertising and promotion, over the past four years is driving robust brand growth and good results.
Opportunity and Issue Analysis
The RTD market in general has considerable negative political, economic and social difficulties to overcome. Health campaigners concerned that Alco pops may encourage binge drinking in underage and young drinkers and lead to unsociable behaviour led to the self-regulating Portman Group being established in 1996. Governments are keen to be seen as sympathetic of this stance, often increasing taxation to act as a deterrent, as the Chancellor did earlier this year.
The stringent regulation and negative press have however not dampened the popularity of the RTD market, since the launch of Hooper's Hooch in 1995 industry analysts have consistently predicted that the market was purely a niche and would evaporate, RTD brands have consistently defied this thinking. A parallel can be drawn to the lager market 30 years ago which held a similar share to RTDs today and was also considered a fad, this lager market is the current dominant leader with a market share of 64% in Europe.
Socially, RTDs enjoy significant advantages over the traditional drinking options such as lager, bitter and cider - due to being sweet not tasting of alcohol, appealing to younger drinkers used to sweet drinks (thus sparking health concerns).
Marketing is thus heavily geared to the 18-30 age groups, both male and female, through bright vivid packaging and TV advertising that appeals to the perceive core markets of the brands, both broadly in the area of "laddish" men (football supporters, Loaded readers and Ibiza holiday makers) men and sophisticated women.
With a multitude of liquor brands still not yet tapped into the RTD market there is still significant opportunities for companies to enter the market. However, like alternative RTD WKD based on Irn Bru, new entrants will have to provide something innovative in their marketing mix to make a significant impact. (source: AcademicDB.com)
SWOT analysis
Strengths:
• Strong globally accepted brand “Bacardi”
• Strong profile in target market 18 – 39 (premium brand)
• Line extension of Bacardi brand
• Appealing marketing campaigns
• Privately owned – agile decision makers
• Strong company, able to deliver
Strong globally accepted brand “Bacardi”
The brand name “Bacardi” is historically a well-known name in around 170 coun-tries worldwide. About 140 years ago don Facundo Bacardi Masso grounded the company and until today the members of the Bacardi family are still the owners of that expanded company. I think everybody knows the meaning and the background of the cocktail “BarCo” or the mix of Bacardi Rum and Coca-Cola. A new drink like Bacardi Breezer Light takes advantage of the good and well-established name of the brand.
Strong profile in target market 18 – 39 (premium brand)
Bacardi has introduced the Breezer as one of the first ‘party drinks’, appealing to a new, young target market female and men in the age 18-24. But we could use our knowledge to extend this to a female group in the age of 25 – 39 years.
Line extension of Bacardi brand
To broaden the target market, different drinks have been added in the product mix of Bacardi-Martini Ltd. Bacardi-Martini Limited own, sell and distribute premium brands including Bacardi rums, Martini and Rossi vermouth, Asti sparkling wine, Demars Whisky, BombaySapphire Gin, Disaronno Amaretto, Bacardi Breezer, Bacardi Breezer Twist, Cuba Libre and Daiquiri, Kalyr, Vodka and Bacardi & Cola.
We could easily introduce a new light product that is demanded by a great segment females in age 25-39
Appealing marketing campaigns
Advertisement has been a major part of Bacardi. The striking logo with the typical bat makes it easy to recognise the total Bacardi brand. TV commercials have been made with a smooth, fast, modern, beautiful, exotic, hot image. The Breezer Light fits very well into this concept.
Privately owned – agile decision makers
The group of decision makers is small and in close contact (as family members), which creates a situation where decisions can be made agile. Communication is easy and without unnecessary steps in between. New products make more chance to be implemented quickly within such a flexible organization structure.
Weakness:
• Innovative leader: paying all “child diseases”
• Profile limits target market to youth
• Formula / taste does not appeal to everyone
• High prices for target market
• Small company comparing with the competition
• Risk of family breakdown
• Internal investments of capital
Innovative leader: paying all “child diseases”
In general, an innovative leader must invest the most in marketing, advertising and promoting the new product on the market. All this energy and costs are necessary to attract people to buy the product, which is new and unknown until that moment. At this point there are no players in the segment RTD Light.
Profile limits target market to youth
Bacardi-Martini Ltd has positioned the Breezer primarily in the target market of the younger female in the age range from 18 to 24 years. The Breezer Light broadens the target market to 39 years.
Formula / taste does not appeal to everyone
Choices of advertisement, image building (“Latin Lovers”) etcetera make the product popular in a very specific target group. Therefore, other age-groups, cultures, gender, might not be attracted to the product.
High prices for target market
Bacardi Breezer Light pricing strategy should be positioned the same as that of the Breezer. Because the economic situation for young people have been changed dra-matically the last years in Western Europe, this pricing strategy is under pressure nowadays.
Small company comparing with the competition
If you are looking globally at the total industry of drinks Bacardi – Martini Ltd is a small player compared with companies like Allied Domecq Plc, Diageo Plc, An-heuser-Busch Inc, Heineken NV, Coca-Cola Company, Cadbury Schweppes Plc, PepsiCo Inc, Red Bull etc. However, in the market segment of rums Bacardi is the market leader. If you look at the market segment of RTD’s where Bacardi Breezer is allocated, they are one of the four market leaders. All these companies have a varied assortment of RTD’s but not a light version.
Risk of family breakdown
Bacardi – Martini Ltd is the only private company in the market of alcoholic drinks. The family members are the only shareholders of the company, so they have the total control over the company. One of the main reasons for a family owned company to get in trouble is their internal dispute, for instance when one of the family members has debts or when there is disagreement about new investments.
Internal investments of capital
All new investments of capital must be approved by a small group of family members. Thus, for example, if Bacardi would like to acquire Heineken, all the capital must be found internally or financed with new bank loans, debts. This needs approval of the management board (all members of the Bacardi family). In all other companies in the same industry the owners of the company are a big group of inves-tors (shareholders), so it is easier for them to collect a great amount of money.
Opportunities:
• There is a demand gap: Female in age 25 – 39 purchasing power
- Europe as a mature market and AsiaPac and South America as an emerging market (Brazil, Russia, China!)
- Change marketing approach: ‘goodwill’ support and association with socially desirable issues like responsibility and health
• Marketing through ‘environmental awareness (‘green- issues’)
• Growing number of also middle aged people prefer lifestyle of the young
• By globalisation the social and political environment will be change
• People are starting drinking at a younger age
• Economic growth will be increasing the market of parties, festivals.
There is a demand gap: Female purchasing power
In the past alcoholic drinkers were men, but after social, cultural and economic changes there was a shift towards women becoming more independently. They are now going out more to restaurants, bars, pubs with their friends. Major issues in the lives of women aged 25-39 years are health, weight, well-being, image, etcetera. Light drinks fill their needs. In that way, Breezer Light offers a good combination of pleasure, low-calorie drink, strong image.
Europe as a mature market and AsiaPac and South America as an emerging mar-ket (Brazil, Russia, China!)
Europe is a mature market and stable market, because in the old EU countries there is decrease of the purchasing power, and in the new EU members there is great growth of purchasing power. Asia & Pacific and South America are emerging markets, because in these areas the growing purchasing power and the growth of population are at high level.
In the western countries people will be more ready to accept the new Light variant of the Breezer.
World Population Growth, 1750–2150
Source: United Nations, World Population Prospects, The 1998 Revision; and estimates by the Population Reference Bureau.
Change marketing approach: ‘goodwill’ support and association with socially de-sirable issues like responsibility and health.
By changing the marketing approach: ‘goodwill’ support and association with socially desirable issues like responsibility and health you create the image that your product is alright and that it is not wrong or bad. The Breezer Light matches well with this image.
Marketing through ‘environmental awareness (‘green- issues’)
You could play on the awareness of people, namely that they would like to live in a clean and healthy environment without damage the nature and no pollution. If you market this idea on your production process you could win a new group of customers.
By globalisation the social and political environment will be changed
Globalisation will have more impact on the business strategies, because there must be more controlled and monitored of the differences between all social and political environments. How should the differences between countries be handled, such as beliefs, needs, wants, culture, religion, etc. The world is more complex, but at some points it will grow together.
Economic growth will be increasing the market of parties, festivals
If people have more purchasing power by an economic growth they will spend more money to visit parties or organise them, and visit special events more often. This means all those places where you also consume alcoholic drinks, like restaurants, bars, festivals, etc.
Growing number of also middle aged people prefer lifestyle of the young.
The population in EU in the age range form 15 to 24 is decreased form 14,5% (1992) to 12,4% (2000). The category 25-39 there is increasing gradually. It is known that people grow older in a healthier way, being more aware of health risks. The Light variant of the Breezer should be attractive to this group of older people.
People are starting drinking at a younger age.
It is stated that young males are the heaviest drinkers (increasing among young women), but most reduce drinking at age 25-30. If you lower the allowed age for drinking you directly see an increase in the consumed alcoholic drinks. At that time people between 18-19 years would drink the most alcohol.
Threats:
• New entrants on the market
• Joint-Ventures, Merges and Alliances
• The aging of population
• Legal limitations on marketing and accessibility of alcohol
• General policy to limit alcohol consumption
• Growing EU population with alcohol prohibiting religion (Muslim)
• Governmental Legalisations and Regulations
• Local taxes and duty rates
• Geographical shift in population
• Economic slowdown
• Water shortage
New entrants
Every year several new products come into the market and new companies step in this growing segment of the ready to drink (soft alcoholic drinks, beers, etc.) market place. Already several years there is an overall growth rate of 5% each year. The strongest companies have a very varied product mix. It is possible and probable that one of the other companies will introduce a Light-version of an RTD.
Joint ventures, merges and alliances
In the future to get more volume share it is for companies necessary to acquire other companies, or built up alliances such Coca-Cola with Bacardi.
The aging and gender structure of the population
Aging population; proportion of population aged 15-24 in 1992 was 14,5% in 2000 this number was 12,4%. The category 25-39 is increasing gradually (sources are CBS and United Nations).
In most EU countries a negative or zero growth is estimated for the future.
The age-sex structure of a country can be studied through population pyramids. The overall shape of the pyramid indicates the potential for future growth. The four representations of population age-sex structure provide an overall example of what a pyramid for different levels of population growth would look like — rapid growth, slow growth, zero growth, and negative growth. The horizontal bars show the per-centage (or in some cases the actual numbers) of males and females in each age group.
Age-Sex Structures in Transition
Source: United Nations, World Population Prospects, The 1998 Revision; and estimates by the Population Reference Bureau.
Legal limitation on marketing and accessibility of alcohol
Political and legal environment: of the 25 EU countries 18 have legislation with regard to limitations for television advertisements for alcohol. In general these rules prohibit television ads for alcoholic beverages at specific times of the day. In the near future it could happen that for alcoholic drinks the same rules will be introduced as the tobacco industry. For the Breezer Light this will not be a negative influence, be-cause we target this to females in the age of 25-39 year.
General policy to limit alcohol consumption
In general you could notice that there is already a trend that bars, pubs and restaurants are not permitted to sell alcohol drinks to people who are drunk. Stores are not allowed anymore to sell alcoholic drinks to young people under the age of 16 year. The Breezer Light will have the same requirements.
Growing Population with alcohol prohibiting religion (Muslim).
Because most of the world's population growth is likely to continue to be in less developed countries, Asia will continue to hold the majority of the world's people. Africa and Latin America will gain larger shares than they have at present. The population of these regions may increase by 100 percent by 2100, according to moderate projections. In 2100, nearly 90 percent of world population could live in countries currently considered less developed, compared with about 80 percent today.
World Population Distribution by Region, 1800–2050
Source: United Nations Population Division, Briefing Packet, 1998 Revision of World Population Prospects.
Growing EU population with alcohol prohibiting religion (Muslim)
Cultural environment: EU population is still growing, also due to immigration from Asian and African countries. The total number of people that has the religion Muslim as background is worldwide growing at fastest. Different ethnic background and religions of these immigrants will influence alcohol consumption. For Muslims for example drinking of alcohol is prohibited.
Local taxes and duty rates
In general, we could assume that if local taxes or duty rates increase on alcoholic drinks this means automatically a reduction on the forecasts of the alcoholic market.
The consumer awareness of health and well-being
Retailers of the drink market are becoming aware of the potential growth in bottled water sales. The bottled water consumption has been increased from 1 litre (1985) to 35 litres (2003) per capita. Consumers are becoming increasingly aware of their health and well-being.
Economic slowdown (Macroeconomic outlook)
If the macroeconomic outlook in many developed economies is in a crimping phase this has as result an increased focus on the sustainability.
Falling consumer confidence
The global ready to drink market segment could face difficulties as a result of failing consumer confidence of the future.
Water shortage
In the near future there will be a drinking water shortage, because the global population is growing with a rate of 9% per year. As a result of this growth rate the need for clean and drinking water will increase dramatically. This will effect the price of raw material and so the production cost of the Bacardi Breezer Light.
A prime cause of the global water concern is the ever-increasing world population. As populations grow, industrial, agricultural and individual water demands escalate. Water supply cannot remotely keep pace with demand, as population soar and cities explode.
Governments
Most EU countries have a system of self-regulation, meaning that the government leaves until a particular point the alcohol market themselves to come up with limitations on their marketing efforts.
SWOT Matrix for the Bacardi Breezer Light is as follows:
S-O strategies:
- A changing attitude towards drinking alcohol has developed within certain age groups, so Bacardi Breezer could focus on specific group related demands like health awareness, weight and sugar free products.
- Bacardi Breezer will extend its product lines with sugar free products, that have the same alcohol percentage as the Breezer. This means the introduction of the Bacardi Breezer Light.
- For introduction of the new product the well known brand name of Bacardi will be used.
W-O strategies:
- As the first company introducing the new ready to drink sugar-free Breezer Light it is essential to give proper information, a clear advertising campaign, and an appealing appearance to the target market.
- As a small company it is necessary to work together with other global companies, e.g. to supply the product in countries where it is not able to deliver directly.
S-T strategies:
- By carefully watching population changes in age, it is possible to adjust the product to new demands (e.g. the introduction of the Bacardi Breezer Light).
- By carefully watching income changes prices should be adjusted.
W-T strategies:
- Being a small private company it is inevitable that enough family members will be there to continue the business, now and in the future. If there are no family members for the future discussion will have to start about the organization of the company.
- Looking for ways to optimize the water production and may be finding alternative ways of water supply are important to keep being cost-effective.
Summary of key issues likely to impact on the organization’s achievement of its objectives
The Five forces analysis of Porter helps Bacardi Breezer Light to contrast a competitive environment. It has similarities with other tools for environmental audit, but tends to focus on the single, stand alone, business or SBU (Strategic Business Unit) rather than a single product or range of products. In our case we analyze Bacardi’s ready to drinks.
Five forces looks at five key areas namely the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry.
The threat of entry.
- The market of ready to drink is oligopolies and this means that the market is dominated by four major players who produce almost the complete range of differentiated products. It is very difficult to entrance this market.
- Since the product Bacardi Breezer has been introduced to the market in the past, it should not take high costs to introduce a spin-off like Bacardi Breezer Light. However, costs for advertisement might be high since the brand has to invest in product awareness, especially since it is the first one on the market.
- Mainly, for Bacardi Breezer Light the same distribution channels can be used as for Bacardi Breezer.
- Government actions like new laws, taxes, etcetera influence both the Bacardi company as much as the competitors.
The power of buyers
- Being in a market with only a few brands that produce RTD’s, the power of buyers is not very high.
- Being one of the major deliverers of RTD’s the costs of switching within the distribution channel is low.
The power of suppliers
- Bacardi is a powerful brand, being a stable and innovative private company during more than 140 years
- There is a possibility integrating forward, e.g. organization of festivals.
- Being one of only a few brands that produce ready to drinks, customers have little bargaining power
The threat of substitutes
- Bacardi Breezer Light is like a cocktail that is ready to drink, easy to serve. Cock-tails will be preferred when they are served in a cocktail bar with good looking guys throwing bottles and glasses. Breezers don’t have the charm of this kind of serving.
- The Breezer Light will fill the need for a low caloric alcoholic drink, however the target market might go for healthier alternatives.
- We could always do without alcoholic drinks.
Competitive Rivalry
- This is most likely to be high where entry is likely; there is the threat of substitute products, and suppliers and buyers in the market attempt to control. This is why it is always seen in the centre of the diagram.
- Legal limitations on advertising directed at younger population. General policy to limit consumption of alcohol.
- Creative marketing campaigns aiming to improve image alcoholic beverages and increase Bacardi’s goodwill (i.e. make sure Bacardi is associated with health is-sues: ‘don’t drink too much’, ‘drive home safely’ and/or ‘environmental aware-ness issues’).
- Bring more mature RTD’s (new flavours, colours and packaging) on the market to target different market segments, e.g. middle aged consumers appealed by ‘life style’ of the young and restless.
Marketing Objectives
New Product Description
The new product is called Breezer light. It consists of the same ingredients as the regular Breezer, but it will contain less sugars and therefore less calories.
Because this product contains less sugar it will in general have less impact on the health and weight of the average user. We therefore consider it to be a ‘light’ product, which will appeal to especially young women. Bacardi Breezer light adds a new product to the existing RTD’s in Bacardi’s portfolio.
Target Market
The target market consists of young women who are attracted to the lifestyle and image that already is attached to the Breezer brand, but who are at the same time conscious about their health. Within this market we see two segments, like the youth (18-24) and the young women (25-39). Because we target several segments with a range of Breezer products, our target market model is the following:
Primary Target market:
Women 25-39. This is a new market segment for Bacardi Breezer. These women are more ma-ture, but still insecure about their appearance and looks. They are at the beginning of their work-ing careers, and in this new social context they meet plenty of new friends. They want to be looked at by these new friends as attractive and fun to hang around with. In the later stages, after they’ve passed the age of 30 and have met a man and maybe even have had children they are even more health oriented. That is why these women are even more conscious about their weight and eating and drinking healthy. Also, these women earn the money to pay a little bit extra for healthier food and drinks.
Secondary Target market:
Women 18-24; key terms: fun loving, care free, out going. This is the current target market for all our Breezer products. This age group is young and in the ‘insecure’ adolescent stage, and there-fore busy with their appearance and looks. Bacardi Breezer light will therefore appeal to this group because it contains less sugar and less calories than our other Breezer products.
Positioning Statement
To the liberated, Latin spirited woman of today who demands a premium beverage Bacardi Breezer Light is a ready-to-drink experience that offers a tailor-made experience to match her outgoingness. In contrast to other RTD’s in the market such as Smirnoff Ice or Kalua Kiss our Bacardi Breezer Light appeals more to her expectations of full flavour, same alcohol, half the calories and the complete image of our Breezer range.
Marketing Goals
Bacardi Breezer dominates the European on-trade market with 35% within their own RTD cate-gory and looses to beer with 11% in the overall category most preferred on-trade drinks. Other popular drinks among target markets (18 – 35 male/female) are mixes (i.e. Bacardi-Coke, Wodka-Orange). In the off-trade we again see a domination of the EU markets in the RTD category. All numbers are growing and peaking since 2nd half 90’s.
Bacardi Breezer light aims to be the market leader in the RTD light category. Through product development (i.e. the Bacardi Breezer light product) we target both our already existing customers as well as new customers within the described market segments.
In annual sales Bacardi Breezer light aims to sell € 1.2 million in 2005.
Bacardi Breezer Light will be the summer hit of 2005. The marketing campaign will therefore be launched in spring 2005, to support this objective.
Financial Goals
Bacardi Breezer will have to sell up to € 2 million in 2005. We expect Bacardi Breezer light to be a huge hit among the target groups. We therefore expect annual sales of € 1.2 million in 2005, with sales increasing in the years after due to expanding sales channels and increased marketing ef-forts. For further details we refer to financials attached to this Strategic Marketing Plan.
Marketing Strategy/Program
Bacardi Breezer regular line was launched 1995, responding to interest generated by Hooper's Hooch. Although initial sales were poor, they did establish a niche market, sufficient to allow expansion of flavours, including cranberry, lemon, lime, watermelon, pineapple, and orange.
Product
Product is a ‘light’ version of our popular range of Bacardi Breezers. ‘Light’ in our new product means fewer calories acquired through the use of sugar substitutes. The alcohol percentage remains the same as well as the flavour ranges.
Positioning
To the liberated, Latin spirited woman of today who demands a premium beverage is Bacardi Breezer Light a ready-to-drink experience that offers a tailor-made experience to match her outgoingness. In contrast to other RTD’s in the market such as Smirnoff Ice or Kalua Kiss our Bacardi Breezer Light appeals more to her expectations of full flavour, same alcohol, half the calories and the complete image of our Breezer range.
Further, with the term 'positioning' we refer also to the consumer's perception of our product in relation to its competitors. We took the products of our main competitors along with our new Bacardi Light and 'mapped' them together on a 'positioning map'. This allows them to be compared and contrasted in relation to each other.
With Bacadi Breezer Light, we are targeting woman age 25 – 39, medium to high education, working, in their second phase of life fulfilment (career, relation and independency).
Features (how it will be different from the competition)
Our Breezer Light differs from our competitors because of the product formula; less calories, same alcohol. It targets a blank spot among 30+ woman in the ready-to-drink on-trade segment. We have more consumer awareness because of our existing broad brand and product penetration. Packaging will promote self-awareness of second phase. Bacardi Breezer is available in 8 different flavours: Water-melon, Cranberry, Orange, Lime, Pineapple, Lemon, Ruby Grapefruit and our latest edition Diet Lemon (trial for the Breezer Light). Liquid will be more transparent to enhance the “light” experience.
Stage of the Product Life Cycle
Bacardi introduced their ready to drink variant; the Breezer, in 1996. Bacardi Breezer dominates the European on-trade market with 35% within their own RTD category and looses to beer with 11% in the overall category most preferred on-trade drinks. Other popular drinks among target markets (18 – 35 male/female) are mixes (i.e. Bacardi-Coke, Wodka-Orange). In the off-trade we again see a domination of the EU markets in the RTD category. All numbers are growing and peaking since 2nd half 90’s.
Stage in the PLC is Growth; product has been introduced successfully. Product awareness is established and is still growing. Popularity is boosting sales but there is still much room to grow.
This stage of the product also means that our competitors are attracted into the market with very similar offerings. Products become more profitable and companies form alliances specially RDT suppliers. Joint ventures and take each other over. Advertising spend is high and focuses upon building brand. Market share tends to stabilise.
Packaging Strategy (brand name, label, packaging)
The new brand-range of Breezers, Bacardi Light, will come in a new bottle, are in a smaller size (200ml), and packed in 6s for the home "party market" consumer. We expect this to account for 11% of sales, this represents segmentation into nightclub goers and home party users, who was a quick pick-me-up drink, and is only found in large supermarkets ideal for merchandising in bulk.
The Light version will carry the same known and accepted name: Bacardi Breezer Light. “Light” and not “Diet” which has according to our survey a negative connotation among our target group. It will fit within an existing range, within an installed base of customers.
Bacardi Breezer Light will be available in 7 different flavours: Water-melon, Cranberry, Orange, Lime, Pineapple, Lemon, Ruby Grapefruit.
The label will remain the same as the existing line, while the word “Light” will appear underneath the label, crossing it in an upward (positive) motion. “Light” will also appear on the collar of the bottle.
Packaging will follow the existing line; clear bottle, 33 cl, and colourful labels with the same additives. New will be the introduction of a 200ml bottle special for woman who tend to drink less / be saturated much faster. Also new is the introduction of a screw cap, also for the whole range.
To enhance package durability we will continue with our supplying partner Amcor. Amcor PET Packaging is now supplying a custom-designed 350ml AmGuard™ multi-layer PET bottle for the German market. This bottle is produced at its Centre of Excellence in Brecht, Belgium. The bottle offers a shelf life of 9 – 12 months. It is being supplied to our new high speed krones filling line at the Bacardi plant near Hamburg in Germany, which is capable of filling 1,000 bottles per minute.
See exhibits 8.1 Marketing Strategy Program
Regulatory requirements
Promotion possibilities are limited due to legal restrictions on promoting alcohol. While no one is advocating advertising to under 18s, current guidelines make it difficult to target 18-25s. The Advertising Standards Authority code states that you must not show people drinking alcohol who are, or appear to be, under 25, making it impossible to show one of our target market enjoying our product. At Bacardi-Martini, Harrison says: "If there's more European legislation, it will obviously affect us greatly." After the WHO Ministerial Conference on Young People and Alcohol, held in Stockholm this year, a declaration was released with targets set for 2006 aiming to minimise the pressure on young people to drink, "especially in relation to alcohol promotions, free distribution, advertising, sponsorship and availability, with particular emphasis on special events". While this is of only minor consequence to the wine industry at present, it could have repercussions for future promotions to new consumers.
- Quoted: Wines & Spirits legal Journal -
Place
Channels of distribution
Bacardi-Martini Limited has a regional distribution that is driven by regional Bacardi sales forces. We sell only to mayor distributors and country partners with certain regional exclusivities. Bacardi country offices offer predominantly marketing and promotional services to our partners. Bacardi sales forces are the prime contact to those partners.
Bacardi Breezer Light will be distributed to the on-trade (pubs, disco, clubs, and so on) and off-trade (supermarkets, cash&carries, liquor stores and so on). We will use our existing channel partners of wholesalers, retailers and agents specialized in on-trade businesses.
Product location availability
No selective distribution. Our product should be available in all possible outlets and on-trade premises. Pubs and night clubs will enjoy our special attention.
Physical distribution
Physical distribution is trough our partners. Our stock is located in the mayor logistic distribution areas in the active regions.
We take care of transport to ensure product availability. Customers can pick up at our warehouses as well.
Pricing
Proposed pricing strategy
To our channel partners:
Penetration Pricing In which the price charged for the ‘light range’ products is set artificially low in order to gain market share. Once this is achieved, the price is increased.
We are dealing with a push strategy. Penetration Pricing is aimed to convince our distribution partners to invest in retail the product intensively. It allows them margin to negotiate introduction within their own channel customers.
Cost (to produce)
Production cost per bottle of 350ml is € 0,17 euro-cent. This is including the packaging (glass bottle, labelling and screw-cap) cases of 12 bottles. Packaging for on-trade and off-trade are per case of 12 the same. Packaging individual, consumer cases of 6 will rice the price per bottle up to € 0,20 euro-cent. Cases of 6 are only meant for off-trade businesses (retailers, liquor shops, supermarkets, cash&carry).
Suggested retail selling price
We suggest our channel partners to keep the retail prices of “Breezer Light” the same and not higher then the regular range Breezers – which is located in the Premium segment. We want to avoid any thresholds when consumers are considering the product. We also believe that a lower price will suggest lower quality and will have a negative impact on brand and image.
Discounting strategy (sales prices, coupons, consumer trial, etc)
We want to work intensively with our channel partners to promote the new Bacardi Breezer Light experience. We think about marketing aid such as low introduction pricing and additional trial cases for sampling. Also an array of Point of Sale (POS) materials should be developed to attract customer’s attentions to the new Breezer Light proposition.
Discounting strategy is solely for the channel. Consumers should pay the suggested price, which is levelled with the rest of the line. Price is set equally to other Bacardi Breezers to protect the brand and image. We believe to have sufficient value in this product to charge equal retail (and on-trade) pricing. Same goes for the on-trade business.
See exhibits 8.1 Marketing Strategy Program
Promotion
Sell-in
Profile of the sales force
Introduction and sales will be conducted by the regular Barcardi Limited sales teams per country – region. The Breezer “Light” will become an additional product of their regular portfolio.
We also deal with the sales forces of our channel partners and agents. We will develop a briefing program through our local sales forces to update channel partners on this new product release. Also a Breezer Light sales kit will be developed: positioning statement, flyers, campaign program, USP’s, POS range etc.
Introductory offers
Introduction offers will be covered by promotional pricing, additional products for sampling, specific “Light” POS materials (shelf racks, coasters, flyers, displays, coolers and so on). In addition we have an additional budget to support PR and promotional activities. Channel partners can apply for such budget by sending in their promotional planning for 2005.
Sales incentives
For our Bacardi sales/marketing force we suggest an additional bonus (cash) related to specific “Breezer Light” introduction targets within 2005. On top of that, we suggest an additional incentive (Caribbean President’s club trip) for the team who develops the best promotional campaign together with channel partner. Consumer market response and media attention will determinate outcome.
To our channel partners sales force; the Caribbean President’s club resort for the best performing sales rep: related to target sales and introduction in key premises.
Advertising
We will 'integrate' different aspects of the promotions mix to deliver a unique Breezer Light campaign. The elements of the promotions mix are: Personal Selling, Sales Promotion, Public Relations, Direct Mail (to channel), Trade Fairs and Exhibitions (together with local channel partners), Advertising (corporate and local), Sponsorship (specific channel activities). We aim to start our advertising campaign spring 2005.
Media Mix (TV, press, direct mail, radio, web, etc.)
Overall EU corporate advertorials: Primetime TV commercials “Lady Cat” (female counterpart of “Tom”), upmarket magazines (female target) advertorial, web presence through our corporate website and local market webs.
A media-matrix will apply as here below. Matrix will be used as a model in all European countries
Regional campaigns: Local radio commercials, in collaboration with our regional channel partners, BtoB direct mailing targeting the value added chain of players.
Media campaign aims for
- TV and Radio: Product awareness: new Breezer Light – extensive promotional materials will be produced (coasters, phone caps, t-shirts, bags)
- TV, billboards, ads: Image reinforcement: Bacardi Breezer is the RTD for the dare and devil BatGirl of today.
- Ads, coupons, in store promotions, samplings: Sales boost: call to action though coupons
Media Budget
As part of the competitive war, Bacardi has beefed up its advertising budget. Last year advertising represented 18 percent of net sales, and this year that number has climbed to more than 21 percent of net sales, or more than $3 billion. Bacardi USA almost doubled its advertising budget for 2005 to just under $50 million.
We see Europe as a great potential in which we could even exceed domestic US sales. Therefore we calculate an EU corporate media budget of € 45 million. This includes development of EU specific corporate ‘noise’ (TV, magazine advertorials) and regional tailored campaigns (i.e. radio, local ads)
Public Relations Strategy
This is targetting our core segment directly (female, 25 – 39, latin spirit, upmarket). Strategy is to sponsor local key events which attract our specific target group. Examples are: spring fair in Seville Spain, North Sea Jazz in the Netherlands, De Parade in Holland, Love Parade in Berlin.
Other PR activities are “Latin theme” parties in key clubs around Europe; i.e. Club 54 – Ibiza, Jimmy Who – Amsterdam, Radical – Madrid.
Sponsoring of gala nights; specific movies (i.e. Bridge Jones Diaries part two).
Financial Projections
Implementation Controls
Defining the Product Introduction Process
Implementation will be assured and controlled as a project. The introduction of our new Breezer Light range will have all the characteristics of a project (Breezer Light Intro Project – BLIP!). It will be an integrated undertaking, involving all departments. Scope of the project is well defined and managed by parallel project leaders (i.e. marketing, production, sales) and coordinated by an overall project manager. Project will follow a Product Introduction Cycle as depicted here below.
A systematic approach to our new product introduction begins at the concept phase. No amount of marketing and sales can make up for a product which is not what the customer wants. Sales, marketing, applications, customer service, engineering all must be coached to ask strategic questions about where the customer is going and learn to listen objectively to the answer.
With this Bacardi Breezer Light intorduction SMP approved and senior management sending a strong message of support throughout the organization, a detailed product definition phase must be implemented. Marketing and Engineering must work together and focus on being mutually successful. Marketing must define the end result, not the path, and Engineering must put faith in the end target that will be delivered to the customer.
Aside from taste agents, a number of new features are involved when launching our new Bacardi Breezer Light product; product formula, colour consistency, new stronger bottle, new screw-cap, additional labelling, new bundle packaging 6 and 12. Engineering will drive the project toward a workable and manufacturable design, weighing alternative approaches to meet the technical, time and financial constraints placed on it by the customer base. Marketing must continue to monitor the market for any changes in direction or competitive threats.
Once the design has been approved, design verification must proceed quickly. A variety of analysis tools and techniques can be employed by Engineering to estimate the likelihood a design will meet specifications, but ultimately, prototypes will need to be built to prove system performance i.e. new fill and bottling machine and adaptations to the labelling line.
During the prototype build phase, the rest of the organization must begin to prepare itself for the impact of the new product on their departments. Manufacturing must begin to examine the impact on projected production schedules, Marketing must begin to assemble the launch plan (Media mix in full action), including the obsolescence or cannibalization of existing products (existing Breezer line), Purchasing must locate and contract critical suppliers (i.e. Amcor bottling partner), Sales must develop sales forecasts. The new product introduction process is in full swing.
As the new product moves into the manufacturing environment, many tasks are occurring simultaneously. Sales must be filling the pipeline with orders. This will need to be managed carefully depending on unit availability and the degree of secrecy to be maintained. Channel and internal introduction training programs must be in place. Marketing must be well into the media/roll-out plan using every available method to enforce the key messages and total product position. Brochures, ads, sales scripts, sales training and presentation and promotional materials have been developed, and production of these collateral pieces must be completed. Raw materials must be on order and matched to the sales and shipment forecast.
Product Introduction Cycle
The product introduction cycle is a multi-discipline, parallel process requiring expert coordination across the entire organization
Source: Article Channel Magazine, August 1995. “Taking the "Random Walk" Out of New Product Introductions” - David W. Jimenez, President of Wright Williams & Kelly
Sources
- Bibliography; http://www.bacardi-breezer.co.uk
- http://www.public.iastate.edu/~zeezee/MKT%20410.htm
- http://www.borkowski.co.uk/press/vivid260700.html
- http://www.alcoholpreventie.nl/Cooke.doc - Report on the effects of marketing on Alcohol consumption.
- http://www.businessweekly.co.uk/news/view_article.asp?article_id=5422 - Bacardi use innovative packaging
- http://news.bbc.co.uk/1/hi/business/1935681.stm - Taxation on RTDs changed to Spirits
- Sunday Express, November 17, 2002, p8
- Financial Times (London), April 15, 2002,
- http://news.bbc.co.uk/1/hi/business/1935681.stm
- http://www.businessweekly.co.uk/news/view_article.asp?article_id=5422
- The Grocer, November 30, 2002, p55
- Marketing, November 28, 2002, p46
- Marketing, November 7, 2002, p20
- Marketing, November 7, 2002, p42
- Marketing, October 24, 2002, p21
- Marketing, October 24, 2002, p21
- Marketing, November 7, 2002, p20
- "Icy looks in new Smirnoff advert", Off Licence News, November 08, 2002, Pg. 16
- Marketing Week (1998). Why Web is the perfect zone for youth marketing. Marketing Week, 24 September 1998, article found on mad.co.uk, http://www.mad.co.uk
- Rob Malcolm, Diageo Innovation Center Manager, from http://www.forbes.com/global/2002/0415/024sidebar.html
Exhibits
Marketing Strategy / Program
Packaging: Promotional materials
